I agree with this summary of the problem as far as US-China trade relations go, but I disagree that the solution is a return to retrograde 19th century mercantilism. The solution is to recognize that all forms of state interference in the economy have a net effect of upward distribution of wealth, and to act accordingly, i.e. by attacking the state from the bottom up.
By William S. Lind
President Trump is right to confront China on the trade issue. China has long been dumping materials such as steel on the American market, and it has been acquiring technology we have developed by means open and surreptitious. Together, China’s predatory trade policies have devastated American manufacturing and largely destroyed our blue collar middle class. Here in Cleveland we have seen whole factories bought by Chinese, torn down, and re-erected in China. What were good-paying American jobs became Chinese jobs.
At the same time, America needs China at the grand strategic level. To meet the threat posed by Fourth Generation war, we need an alliance of all states. The core of such an alliance must be the three greatest powers, Russia, China, and the U.S.
Nor should we wish to damage China’s economy. The world is teetering on the edge of a global debt crisis. Such a crisis is most likely to begin in China, whose recent prosperity is built on a $15 trillion mountain of debt, much of it bad. A debt crisis in China will quickly spread. It is likely to end in a world-wide depression to rival that of the 1930s. America, which like China continues to pile up both public and private debt, will not be exempt. America tomorrow will be Greece today, with the added nightmare of hyperinflation as the federal government seeks to pay off its debts with worthless money. That is a future we should do our utmost to avoid.
I think there is a way out of this seeming dilemma. What is it? Managed trade.